What Are The Policy Implications?

Central factors that will make an RUC scheme contribute to positive environmental effects are (in order of importance):

i. an overall reduction of traffic volumes and vehicle mileage ii. reduction of traffic where there are a lot of people and in densely built areas. iii. smoother traffic flow, less stop-and-go.

Potential threats that may jeopardise the environmental effects of an RUC scheme are: • spatial redistribution of traffic to more sensitive, or socially more deprived, areas • large changes in traffic mix: large increases of bus traffic or heavy traffic or motorcycles.

There is therefore reason to consider RUC not only from a congestion perspective, but also based on environmental considerations. There may even be cases when, even though congestion problems are not large enough to motivate charging, environmental problems per se would make charging a reasonable policy option.

In setting the detailed design policymakers will often have to balance optimality with respect to these two objectives. Some examples:

• A highly time-variable charge may be the most efficient for congestion reduction (giving incentives for departure time change for those car drivers that are unwilling to change mode). From an environmental perspective, however, it may be better to press harder for mode choice, through a more uniform charge over the day.

• From a noise perspective, the more traffic there is on a road the lower the marginal noise costs are. Hence, charging should be high in congested areas or times for reducing congestion, while prices should be high at nighttimes or in sensitive areas for reducing noise.

• From a congestion perspective, it will often be desirable to divert car traffic to ring roads. This may sometimes increase overall mileage (adverse climate effects), and may increase local environmental problems in previously less problematic areas.

• Before exempting for example motorcycles or alternative fuel cars from charging, consideration must be given to whether increased traffic in exempt categories may jeopardise the benefits of decreased emissions (and noise) from charged vehicles.

• For the use of charging revenues, a policy maker aiming for congestion relief is likely to focus those investments that will further support that objective – such as investment in new road infrastructure. Increase in road capacity will increase the demand for vehicle traffic generally and therefore imply adverse climate effects. A policy maker who has, instead, her focus on environment would prefer to use the money for, for example, improving public transport.

• If the charging scheme is to be used as an incentive for car fleet transition (exemption for green cars), this ambition has to be balanced against the detrimental effect such exemptions will have on congestion reduction.

When it comes to formulating and implementing a charging scheme in practice, however, there will in most cases be more synergy than conflicts between the two objectives “reducing congestion” and “improving environment”. Perhaps most importantly, a combination of the two objectives is likely to increase the number of citizens who agree that “there is a problem (congestion or environment) that needs to be solved”. Obtaining agreement on this point has been shown to be one of the major determinants of public acceptance for charging (Schade, 2003). Of the two objectives – reducing congestion and improving environment – acieving the second may be the more important in generating public support. Jaensirisak et al (2005) found that among the potential impacts of charging, “an ability to achieve substantial environmental improvements” was the single most important contributor to increased acceptability, followed by “contributions to reducing delayed time for cars”.